2012 (11) TMI 246 - HC - Companies Law

Revival of the company in liquidation - Recall the order of winding up - Held that - In the commercial matters monetary claims can be settled at any stage. The dues of the Creditors and/or Workers of the Respondent if paid and settled, there is no question to continue with the order of winding up. The Court, in such a situation, can dispose off the Petition as it is settled out of the Court The Applicant is willing to settle the matter claims and dues in all respects and accordingly filed an additional affidavit and also brought in the Court the requisite Demand Drafts to be paid to the concerned. The report so filed on record is in no way sufficient to deny the case of recalling the order of winding up as they are concerned with the requisite payments to be made and/or paid to cover the liability and/or due/claim as recorded in the Official Liquidator s report. The Applicants, as recorded above, are willing to fulfill the same. The learned Counsel and all the parties concerned have accepted the Cheque and/or Demand Draft and have no objection of any kind, as the matter is settled. So far claim of Security Guard is concerned, as raised by the Official Liquidator, pursuance to the demand made by the concerned Agency at the relevant time, has been settled out of the Court. An Affidavit is filed accordingly. Thus a case is made out to recall the order of winding up as passed in the year 1999

Summary

Issues:
Recalling winding up order under Section 466 of the Companies Act, 1956 and dismissal of the Company Petition.

Detailed Analysis:

1. Background and Petition Details:
The Applicant sought to recall the winding up order dated 10th February, 1999, and dismiss the Company Petition under Section 466 of the Companies Act, 1956. The Applicant was a shareholder and member of a public limited company in liquidation, Surlux Diagnostic Limited. The debt leading to the winding up order was filed by Mr. Omprakash Mehra for Rs.15 lakhs.

2. Contentions and Disputes:
The Applicant argued that the company was profitable and provided essential diagnostic services. Due to financial difficulties and disputes with Mr. Omprakash Mehra, the debt remained unpaid. The Applicant proposed to settle all outstanding dues and revive the company for the benefit of creditors, shareholders, and the public.

3. Legal Proceedings and Orders:
Various court orders were passed regarding possession of the company's assets, servicing machinery, preparing inventories, and settling claims. The Official Liquidator took possession of the Diagnostic Centre and submitted reports on claims and settlements. The Court directed the Applicant to settle the dues to recall the winding up order.

4. Legal Principles and Precedents:
The Court referenced legal provisions under the Companies Act, 1956, and the Code of Civil Procedure, emphasizing the importance of settling dues to recall a winding up order. The Court highlighted the need to fulfill obligations towards creditors and workers to avoid liquidation.

5. Recall of Winding Up Order:
The Court found merit in the Applicant's efforts to settle all claims and liabilities. The Applicant's willingness to make payments and the absence of objections supported the decision to recall the winding up order. The settlement of dues and acceptance by all parties facilitated the recall.

6. Disposal of Company Petition:
With all claims settled and no outstanding dues, the Court decided to dispose of the Company Petition. The absence of objections and the settlement of monetary claims allowed for the withdrawal of the petition. Precedents were cited to support the withdrawal of the petition in similar circumstances.

7. Final Orders and Directions:
The Court ordered the disposal of the Company Petition, subject to miscellaneous expenses to be paid to the Official Liquidator. Upon payment, the Official Liquidator was discharged, and possession of assets was to be handed over to the company. The company was directed to take necessary steps in compliance with the order.

In conclusion, the judgment highlighted the importance of settling dues to recall a winding up order and emphasized the need to prioritize creditors' and workers' rights in such proceedings. The Court's decision to recall the order and dispose of the petition was based on the satisfactory settlement of all claims and liabilities, ensuring the revival of the company and the protection of stakeholders' interests.